As with many questions regarding employment law, the answer is that the employee's right to view his or her personnel file depends on the law of the state where the company is located. (There is no federal law requiring that employees have access to their personnel file.) By law, in 18 states (as of 2006), employees have the right to review their own employee files. California, Illinois, and Pennsylvania, for example, do have laws giving employees of private companies access to their files; on the other hand, Colorado, New York, and Texas do not.
Even in states that allow employees access to their files, they can't demand to see them on the spot and instead the employer must produce them within a reasonable time frame. However, what is "reasonable" depends on the particular state and can range from 48 hours to 14 days. This request should not be a problem if someone at your company is maintaining your employee files properly.
In those states that provide for employee access to their files, employees often also have the right to make a copy of any document in the employee file. This should not be an issue, as the employee already should have seen and signed most of the documents in the file.
Even in states where employees do have a right to view their personnel files, there are some documents that can be withheld. These usually are ones that would implicate third parties, besides the employer and the employee, as with reference letters or documents related to an internal investigation.
If an employee disagrees with any item in the file and the employer does not voluntarily remove it, some states allow the employee to submit a document to their file indicating the reasons why the item is, in his or her opinion, inaccurate.
Employers should contact their state’s department of labor for further information on what is required under the law in their particular state.
If the state your company operates in does not require you to allow employees to see their personnel folders, it would be smart to allow them access anyway. Having an open employee file rule builds trust. On the other hand, barring employees from reading about themselves can send a negative message.